by Harold Calla | from The Hub, December 16, 2024
On the northwest coast of British Columbia, the Haisla Nation is writing its own success story. It has secured majority ownership in Cedar LNG and is bringing the $5.5 billion project to life. This project will leverage Canada’s abundant natural gas and deliver a lower-carbon energy option to global markets.
While several major resource projects have stalled in Canada over the past two decades, the Haisla show us how to drive projects forward in a way that meets a First Nation’s community standards, honours their role as stewards of the land, and grows the economy.
Increasingly, we see other countries looking to the potential of Canada’s resources to reduce their reliance on countries like Russia and China for cleaner fuels and critical minerals. Virtually all these resources are found on the traditional territories of Indigenous Peoples in Canada. We cannot ignore that First Nations have the right to free, prior, and informed consent (FPIC) before economic activity takes place on these territories. Court rulings and the United Nations Declaration on the Rights of Indigenous Peoples have confirmed these rights.
Governments and businesses must avoid any attempt to circumvent Indigenous rights and embrace them instead. If we get this right, we can support environmental sustainability and respect the rights of Indigenous Peoples while driving economic growth.
What I have seen is that when First Nations are partners in natural resource projects, they build prosperity for their communities and all Canadians.
In the Lac-Saint-Jean region of Quebec, Pekuakamiulnuatsh (Mashteuiatsh) First Nation has built a wind project and three hydro projects with financing from the First Nations Finance Authority (FNFA). Since then, the Nation has generated more revenues for community needs and boosted employment opportunities The same story is being told by Henvey First Nation, where they were—again with the FNFA’s support—a partner in providing clean wind-powered energy to around 100,000 Ontario homes.
First Nations will be needed to support increased power generation across the country, including in Ontario. Ontario’s Independent Electricity System Operator projects that the province’s demand for electricity will increase by 75 percent by 2050—the equivalent of adding four and a half cities the size of Toronto to the grid. As with critical minerals, First Nations are located either on the land where greener energy projects are best located, or often where the transmission of energy needs to occur. We need solutions that support First Nations to be involved in ways that both respect local environmental concerns and generate revenue for First Nations communities.
By generating wealth as partners in development projects, First Nations can create jobs, improve infrastructure, and invest in education and health care. They can begin community projects—like clean drinking water—immediately, rather than watch costs inflate while waiting on Ottawa bureaucrats.
But we face steep challenges. The Indian Act and other policies have blocked, stifled, and denied First Nations participation in the mainstream economy for centuries. For much of Canada’s history, we were denied the ability to get bank loans, hire a lawyer, or become business professionals. Entering commercial contracts was near impossible. Barriers to full economic participation exist today. They must be removed for our country to move forward.
It is imperative that Canada and the private sector support resource development in a way that meets the country’s economic needs while fully supporting FPIC.
One of the things that must be improved is getting to the final investment decision more quickly. The regulatory framework must be completely revised to facilitate Indigenous consent and inclusion, with clear timelines and processes that First Nations and all partners can rely upon. Such a framework will attract more international investors and allow for more projects that support reduced emissions.
A major challenge is the gap First Nations face in securing access to affordable financing. The federal government’s new loan guarantee program is a step, but it does not take us nearly far enough. We need risk capital at affordable rates.
The First Nations Financial Management Board recently asked Momentus Global to look at the gaps in access to capital. A Vancouver-based, global advisory firm, Momentus has extensive experience with more than 80 development banks globally. Their report on the situation in Canada recommended an Indigenous development bank as a preferred approach to increase access to capital and unlock Indigenous economies.
We do not see an Indigenous development bank as replacing, or even competing, with current public and private sector offerings. It would expand opportunities, reduce the risk involved, and entice international investors—particularly those in the capital markets looking for investments aligned with ESG principles.
The opportunities are tremendous. Members of the First Nations Major Project Coalition members are developing a portfolio of major resource and infrastructure projects across Canada, each with an actual or potential First Nations equity investment component. The Coalition believes there could be more than 470 projects, with $520-550 billion in project value.
Positive impacts will be felt across Canada if barriers to affordable capital are removed and First Nations are supported to be economic partners in development projects. Communities will prosper and projects will be more sustainable with Indigenous perspectives at the table.
Canada has stiff competition from other countries to supply the minerals and other resources needed for the future. In 2008, British Columbia missed out on millions in LNG investments and a massive opportunity for Canada to support low-emissions growth. The same will happen again if the federal government fails to open doors to fully bring First Nations into the mainstream economy.
Canada can’t afford to continue with the status quo of stalled projected and lost opportunities. Indigenous Peoples want to contribute to Canada’s GDP, not be treated solely as an expenditure.
Success won’t happen unless we tell a new story, one with full and real Indigenous consent and participation. With greater access to capital and critical changes in government policy to build greener and more sustainable projects. With Indigenous-led solutions that will drive success for all of Canada.